USD/JPY ? Below 79.50, 78.30 is Next Key Support

The USD/JPY continues to be bearish and is now cracking the 79.50 pivot. This was a resistance pivot on Oct. 31, 2011, and not really a support factor other than that. Instead, the 79.12, 61.8% retracement level might provide some support. However, the next key level of support is near 78.30. Here, we have the 200-day simple moving average as well as the resistance level for a consolidation from Nov. 2011 through Jan. 2012.

From this support cluster, we can look for a bounce. However, in considering of the declining channel seen in the daily chart, the bullish outlook should probably be limited first to the 80.00. Then a breakout opens up at most 81.00, and only with further confirmation above should we consider a return toward the highs just above 84.00.

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